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Councils take €311 million hit as commercial rates are written off

Figures published by Phil Hogan reveal the extent of the financial hit taken by councils as local enterprise goes under.

The mushrooming presence of empty retail units has left many councils writing off millions in expected income from commercial rates.
The mushrooming presence of empty retail units has left many councils writing off millions in expected income from commercial rates.
Image: Mark Stedman/Photocall Ireland

IRELAND’S CITY, COUNTY and Town Councils lost €311 million over a five-year period due to a major increase in the amount of commercial rates written off.

The rates are a valuable source of income for local councils, charging a tax on shops, factories, offices and land put to commercial use.

Figures published by the environment minister Phil Hogan show that between 2006 and 2010, councils wrote off nearly €311 million in rates – admitting they were unlikely to collect their dues from struggling businesses.

The rates written off in 2008 – the year in which the property bubble peaked, and the global financial crisis began to take hold – stood at €47.7 million.

Just two years later, however, councils were forced to write off €88.9 million as local enterprises began to shut up shop.

Dublin City Council has taken the biggest hit, writing off €58.5 million in rates – though the 2010 figure, of just over €9 million, was less than half of the €19.9 million written off in 2006 when the local enterprise scene was far healthier.

Cork County Council has lost €21.8 million, including €6.7 million in 2010 – the year for which the most recent figures are available – while Galway county council lost €13.1 million and Galway City Council €12.6 million.

At the other end of the scale, however, six councils have not written off any commercial rates. They are the county councils of Kildare and Meath, as well as the town councils in Athy, Kells, Trim and Cashel.

€1.246 billion in commercial rates was collected by the 88 county, city and town councils in 2010, a figure which had decreased slowly since 2008.

Read: Good news for business: Dublin City Council to spread burden of commercial rates

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Gavan Reilly

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